digital gold industry overview jim davidson free market monetary education association 13 december...
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Digital Gold Industry Overview
Jim DavidsonFree Market Monetary Education Association
www.freemarketmoney.org
13 December 2006
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13-Dec-06
The Digital Gold Economy
Ten years old Key Entrepreneurs High level participants Growing Sound Economics
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History of the Digital Gold Industry
Founded 1996 by Doug Jackson of e-gold
Liberty Dollar founded in 1998 by Bernard von NotHaus
In 2001: GoldMoney founded by James Turk; e-Bullion founded by Jim & Pamela Fayed; 1MDC founded by JP May; Pecunix founded by Sidd Davis
In 2005: Loom founded by Patrick Chkoreff; Phoenix Dollar founded by Gordon Hayes
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Key Entrepreneurs
Doug JacksonCo-founded e-gold 1996 with Barry Downey. Melbourne, Florida. Seeks freedom from default risk, finality of settlement, international reach.
Bernard von NotHausFounded Liberty Dollar 1998. Monetary architect for a well-designed competitive currency. Twenty-five years mint master Royal Hawai’ian Mint. Author of The Liberty Dollar Solution.
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Key Entrepreneurs
James TurkFounded GoldMoney in 2001. Concerned about failure of Herstatt bank in June 1974. Developed digital gold solution. Author of Coming Collapse.
Simon “Sidd” DavisFounded Pecunix in 2001. Civil engineer, programmer, entrepreneur.
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Key Entrepreneurs
Jim FayedCo-founded e-Bullion in 2001 with wife Pamela Fayed. Cousin to Dodi al-Fayed. Goldfinger Coin and Bullion coin shop owner.
JP MayFounded 1MDC in 2001. Multi-millionaire software entrepreneur, Interesting Software, Ltd. Developed BestGoldCard in 2005.
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High Level Participants
Doug CaseyRecommended GoldMoney in his International Speculator newsletter. Bestselling author, entrepreneur, financial advisor.
Wes McCainTowneley Capital Management (est. $8 billion under management) is a director in GoldMoney
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High Level Participants
Clifford PressChairman of GoldMoney. Co-founded Hyde Park Holdings in 1986 with Laurence Levy. Hyde Park owns High Voltage, an industrial holding company with annual revenues of $500
million, and other companies.
DRD Gold, Ltd.Shareholder in GoldMoney. This 111-year old gold mining company has annual revenues of $250 million.
IAMGold Corp.Shareholder in GoldMoney. Mid-tier gold mining company.
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Size
$293 million in gold, silver, and other metals are stored to provide redemption for digital gold currencies in circulation
Four and a half million accounts across eight major currency services
About 50,000 active web stores offering products and services in exchange for gold
About $10 billion in economic transactions in 2006
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Market Share by Circulated Value
e-Bullion7%Pecunix
1%
e-gold25%
GoldMoney57%
Liberty Dollar10%
Note: Not all digital gold currencies report circulation.
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Market Share by Users
Phoenix Dollar0.50% Loom
0.01%
1 MDC4.33%
Pecunix0.65%
e-Bullion19.48%
GoldMoney1.73%
Liberty Dollar13.80%
e-gold59.51%
Estimates based on various sources.
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e-gold growth
Gold area is gold bars in circulation
Red line is fee income to e-gold from all account spend activity
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e-gold statistics
Account value distribution histograms
Note: Largest gold accounts are likely 1MDC storage accounts, representing ~80,000 secondary users.
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Industry growth - transactions
0
1000
2000
3000
4000
5000
6000
7000
8000
9000
10000
2004 2006mil
lion
s o
f d
olla
rs
Source: indomitus.net/2004status.html
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Industry growth - accounts
0
500
1000
1500
2000
2500
3000
3500
4000
4500
2004 2006
thou
san
ds
of
acco
un
ts
Source: indomitus.net/2004status.html
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Industry growth - online stores
0
10000
20000
30000
40000
50000
60000
70000
2004 2006
Source: indomitus.net/2004status.html
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Industry growth - value stored
0
50
100
150
200
250
300
2004 2006
Source: indomitus.net/2004status.html
mil
lion
s o
f d
olla
rs
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Why are users choosing it?
Online convenience Reduces currency exchange risk Concerns about inflation
– trade deficits
– fiscal deficits
– war
Good store of value Financial privacy
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Limitations
Inconvenient to convert fiat to digital Inconvenient to convert digital to fiat
Liberty Gold Card overcomes both limitations
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Conclusions
Industry is large and growing Product life cycle has completed innovators
and early adopters, starting on mainstream Liberty Gold Card is well positioned to
attract fifty thousand to one hundred thousand users